The New World of Publishing: Some Perspective on 2013

Interestingly enough, 2013 was the second seemingly stable year in the new normal we are all living in the publishing industry.

Does that mean that nothing changed? Of course not. Some things changed, but not like 2009-2011.

And some things will continue to change. But when you step back and look at the business in general, the changes in 2013 were pretty minor and predictable and normal.

So I figured, as I did last year, to try to give a little perspective on the past year from the advantage of watching and living inside of publishing for thirty-five years now.

Traditional Publishing

In 2013, traditional publishers were in a normal state of flux. They cut warehouses and printing costs as a reaction to reduction of print sales as they did the year before. That move has been expected for decades. They are adding in more ways to get books into electronic editions where more profit-per-unit-sale lives. Just normal “run to the money” thinking of all publishers.

Of course, the problem with this is that in 2013, electronic book sales were flat and actually declined over all trade publishing. So traditional publishers must now search for other ways to replace the shrinking money from paper sales or find themselves in big trouble. This has been a major topic in the last few months of 2013.

A number of the big traditional publishers settled lawsuits with the DOJ over agency pricing, but all the short-term repercussions of that suit were already worked into the systems. So nothing new. We eventually will completely return to the old system that worked just fine for many, many decades.

Traditional publishers have already started the expected cutting of book lines and mergers. They are also starting new book lines, many are electronic only. This will happen at both large and small scales.

Smaller publishers will continue to grow into the areas left behind and become big publishers over the years. This has been the nature of publishing for longer than any of us have been alive, so nothing new there at all.

And following the trend that started three or four years ago, the big traditional publishers are working to tie down as many writers’ books as possible, and control as many rights. So their contracts in 2013 managed to get even worse and have become completely anti-writer.

So for the most part, traditional publishers are just on cruise control, but are facing major challenges that high income from electronic sales won’t save them from.

Traditional publishing “impact events” that might happen in the near future…

— The US or European courts are still messing with the “First Sale” doctrine of copyright law. There are a bunch of cases in courts right now around the world that could cause all sorts of issues with big publishers and small and indie publishers as well, depending on the rulings. Right now, electronic books are not sold, they are licensed. (The person buying the book license has no rights to do anything with the book except read it.) But if the courts rule that an electronic book sale is an actual “sale” and “First Sale” applies, then things will shift dramatically in many, many areas. (The very least of which is “used electronic books.”) There are other aspects of “first sale” rulings coming as well that could affect international sales. This all has been in the works now for two years and we might see some cases come down in 2014 finally.

— Traditional publishers catch a clue and go vertical, meaning opening stores and selling direct to customers instead of direct to the distribution chain only. That will shift everything, but so far I see no major publisher doing that at all, or even talking seriously about it, even with the distribution chain shrinking and moving to a more direct-to-customer approach in many other areas. They will be forced to face this new sales world at some point, but it might be years. I said the same thing last year and have zero movement on this at all.

— Amazon actually opening the rumored public stores. That should change a lot of things for books and act in many interesting ways like a new bookstore chain. Should be interesting if nothing else. But the Amazon Derangement Syndrome (as Passive Guy calls it) will continue.

— B&N will NOT go down. But they might drop different aspects of the Nook manufacturing and sales. That should affect very little.

Indie Publishing

More and more writers, both new and established, moved to indie publishing in 2013.

The indie publishing movement near the end of 2013 is still in some flux, as it should be after only four or so years in this new electronic-added world. Many writers are doing books or backlist titles themselves, but at the same time indie publishing is seeing the early adaptors starting to get discouraged and dropping out.

Again, this is nothing new in publishing. To make a career in publishing, you have to be ready for a long haul, often over decades.

Most beginning writers who went indie two years ago didn’t want to do that, didn’t find the “gold” they were promised after a ton of wasted promotion efforts, and have stopped. Nothing unusual at all. Writers starting off and then quitting was always the way it was even when I came into publishing back in the dark ages. Nothing different. But now it’s not quitting after fifty rejections, it’s quitting after three books up and very few sales.

At the end of 2013 we are also seeing a rise in larger indie presses and indie distributors. Presses such as WMG Publishing with over four hundred titles. And Wordfire Press with a growing list. No surprise there. There is a need and gaps to fill as traditional and mid-range publishers shift around. Again, this movement to fill a void has been standard in publishing over the decades.

The biggest event for indie publishers in 2013 was the silent removal of all labels about POD printed books from the Baker and Taylor and Ingrams catalogs. This allowed bookstores, depending on their credit, to get indie published paper books at varying discounts from 25% to 42%. So indie books starting in the summer of 2013 started slowly making their way through normal channels into bookstores. And many indie published books found their way into the ABA Indie Bound book program this last fall, mostly without the indie publisher even knowing it was happening.

This one change last summer will turn out to have a large impact for many indie publishers in 2014 and beyond.

In 2013, indie publishers finally caught a clue and the entire Kindle Select became mostly a thing of the past. Going exclusive in this new world is just flat stupid. There are no exceptions that I can see.

Smashwords, the largest distributor of indie work to stores (Amazon is a store), got faster and cleared out a bunch of bugs in 2013 and actually started a revamp of their site. But they still have a horrid accounting system that will eventually drive all but the erotica authors away. But it seems from the outside that Smashwords clearly had a good year. Right near the end of the year they partnered with Scribd, which may or may not turn out to be a disaster. Scribd is known for being a pirate site. Should be interesting over 2014 to see how that goes.

During 2013, indie publishing also got to experience the normal fluctuations of publishing seasons, since the explosion of electronic sales no longer masked the standard ups and downs of the publishing sales cycles. This, of course, drove a ton of beginning indie writers (who watch every sale) completely nuts and sent off waves of conspiracy theories, just as what happened in 2012. You would think the writers doing this would get tired of conspiracy theories after a time.

Also in 2013, the early adaptor price of 99 cent ebooks was even more of a no-mans’ land for most regular book buyers than it had become in 2012. That helped indie writers make more money by getting their prices up just under traditional publishers electronic prices. Now the 99 cent price is being used in a smart way by many as a short term sale price, which often has worked.

During 2013, indie publishing in many, many ways, both paper and electronic, spread out over the world. Now your indie books get a much wider reach than any traditional publisher can manage, which not too many people have talked about yet, but will in 2014.

Yes, I said that. Your books go to a wider worldwide audience when you indie publish them than if you sold them to a traditional publisher. Something most beginning writers never think about as they search for the worthless agent.

Also, the Kobo move into brick and mortar stores is having an impact, with Amazon also trying to follow in the last few months of 2013. Next year should be an interesting year as the big electronic stores battle for the growing number of brick and mortar bookstores. (Yes, again in 2013 there were more indie bookstores than the year before.)

And, of course, the news that everyone knows. Electronic book sales flatlined for 2013. I had figured that overall trade sales of electronic would hit 30% eventually and everyone thought I was too low. I doubt the sales will get to 30% now. I think the number will continue to hover around 20% of all trade for years to come. Of course, that varies by genre.

Also, the world is one more year farther away from the stigma that used to be attached to self-publishing your own work. There are still idiots out there holding on to that old belief, but they are few and far between and have no power to influence anything. However, you should never call yourself a self-published author, because bookstores will avoid you. Have your own publishing company and treat that business like your publisher, same as you would treat Simon and Schuster. In other words, act like a business person.

Indie publishing “impact events” that might happen in the near future…

— See the comment above about “First Sale” court cases. Major impact if that goes in a number of different directions for indie publishing. We can only wait and see. Again might not happen in 2014.

— I worry about Smashwords. Their accounting is so bad and so questionable, it has to bite them at some point if they don’t fix it. And partnering with the great pirate site of Scribd is yet another question mark. I think another area to keep an eye on is the Kobo/Amazon push into indie bookstores. That should really be interesting to watch.

Agents

Agents had a horrid year in 2013, just as they did in 2012, and the future does not look bright for an area of publishing that, for the most part, seems to have outlived its value. Many agents, ignoring any hope of pretending to be an actual “agent” under agency law, opened up their own publishing arms to take care of writers too lazy or afraid to do electronic backlist publishing themselves. Many other agents just turned themselves into scams to make a living off of taking writers’ money. But in 2013, many of them learned it wasn’t going to help them.

And with advances and paper sales falling like a stone for even the top bestselling writers, agents entire business model is falling apart around them. We should see some pretty major collapses of agencies in 2014.

There are still a ton of great agents out there, but often they work for agencies that have sticky-finger issues with client’s money. Watch for some more lawsuits to hit the news as well, just as some hit in 2012. That will happen since writers give agents all their money and all the paperwork and then wonder why they get ripped off with money gets tight for the agent. Duh.

Agents started spreading the myth in 2011 (and increased the push through 2013) that writers needed agents to sell movie deals and overseas deals. A total myth, of course, in this new world of world-wide email. But it helped agents feel relevant to focus on an area that before was only a sidelight for them. It is not helping their bottom lines at all, since overseas agents hold most of the money from them. It is a standard area for sticky fingers.

And the traditional publishers still have on their guidelines that you need an agent to sell a book, even though most smart writers have figured out that guideline is just a tissue paper roadblock to ignore. Just like the old “no unsolicited manuscripts” was when I came in.

Also, with traditional publishing contracts getting so nasty over the last four years as publishers made rights grabs, agents can’t negotiate a contract anymore. Agents are not lawyers. These days you need an IP attorney familiar with publishing contracts to even get close to a decent contract. And unless your advance is north of six figures, you won’t get it even with a lawyer.

So agents are the buggy whip area of publishing, and I sure can’t see much that will save most agents over the next decade or so.

Agent “impact events” that might happen in the near future…

— Many large traditional publishers are in the process of setting up direct submission systems. This forward process slowed in 2013 some. Because of the draconian contracts that take all rights from writers, it is in traditional publishers’ best interests to get as many books headed their way as possible and not stopped by agents. Electronic submissions systems direct to traditional publishers (already going in a number of smaller genre lines) will put the final coffin nail in the agent world. This will start up again in many major companies and you will start seeing these new systems appear in late 2014 and the year beyond. And that will start killing the “you need an agent to be published” myth.

Writers

For writers, 2013 has just been another great year in the second golden age of fiction. Writers, both new and old-timers like me, have discovered indie publishing. Many writers are working both sides of the fence just fine. But now with indie publishing we don’t have to wait on late contracts, late payments, and agents who only block what we do.

And the strange or cross-genre work we produce now can get to readers.

2013 was a year that started to prove that being able to sit in a chair and produce is a valuable skill in writing once again, just as it was in the first golden age of fiction in the 1930s and 1940s. Readers want more books and stories from favorite authors and don’t understand the “only one book per year” thinking of traditional publishers.

Writers can now get direct feedback at times from readers, something that was almost impossible under the old system.

But in 2013, there was also a split between writers, people who write, and authors, people who have written and like to promote. A ton of myths have sprung up around promotion and what works and what doesn’t. We’ve had some of those discussions here as well. This silliness will continue.

The main word I heard the last few years from writers was “freedom.” It seems that suddenly we all feel free to write what we want, not what we think some editor and sales force might like. That’s great fun and really became a clear force in 2013.

We also have the freedom to not take bad contracts from traditional publishers if we don’t want. That’s a fantastic bargaining chip in a negotiation, so smart writers gained power over the last year. And now writers who care about their work have an option. And smart writers go to lawyers now, not agents, for help on contracts of all sorts.

“Control” was a word I also heard a great deal from writers in 2012 and in 2013. Control of covers, control of the proofing, control of the quality, control of the rights. All that control became very important and part of many conversations for writers this last year. And that is, let me simply say, fantastic!! I expect those conversations to continue and increase in the coming years.

So writers (with all the changes becoming normal) gained control and freedom. 2013 was a year for writers to try to figure out what each of us wanted to do with that new control and that new freedom. Every writer is different and every writer this last year seemed to react in a very different way. It’s going to be great fun to see how those two words keep pushing the conversations over 2014.

Control and freedom. A real golden age in writing for writers.

Writer “impact events” that might happen in the near future.

— See the discussion about the “first sale” under traditional publishing above. I have no idea how that’s going to be ruled on in all the different cases, but it’s important to writers. Watch the cases, folks. I will try to report on the important ones here.

— Scams in 2013 took out more and more writers and will continue to do so in the coming years. The scams that take writers’ money are becoming so thick it’s hard to tell the good players from the scammers. From “publishers” willing for a percentage fee to put your book up to “editors” willing for a fee to read a writer’s work to “agents” willing for a percentage fee to help you try to sell your book. And so much more.

Sadly, by being lazy and afraid to learn how to do things on their own, a lot of writers will lose their dreams or a number of books or at least a lot of money before this trend calms down again. It has gotten beyond ugly and I see it only getting worse before it gets better. Caution on hiring out work in 2014. Make sure you know who you are dealing with.

— Writers are going to lose all rights to millions of books (traditional publisher’s rights grabs and writers signing something because they feel desperate). Many writers will be sued by publishers and publishers will be sued by writers as more and more writers try to break out of horrid contracts they signed. The writers will lose most of the cases because they signed the contracts. Over the next five years a lot of case law will be built on all this. And most of it won’t favor the writers I’m afraid.

Know what you are signing, folks. And know that if your advance is under six figures, you will never see the rights to those books again.

Summary

2013 was the second “new normal” year we have been through. Publishing sales trends have now applied to indie press work, and a vast majority of established writers are moving some backlist or all of their work to their own publishing press.

Traditional publishing is going along just fine, taking and controlling more and more book rights from poorly represented writers who don’t know what they are signing. Traditional publishers face some major changes, but in 2014 we will only see rumblings of that. Profits right now are solid in almost all the major corporations’ quarterly reports. But they will be faced with more and more writers turning away from bad contracts. A few of the smaller imprints and publishers and a few editors might start the process of pulling that trend back. But it will take years.

And with the flatlining of electronic book sales, traditional publishers will have money troubles by the end of 2014 that will cause more cutbacks and mergers.

Writers are not used to the “control” and “freedom” concepts just yet. Old myths die very, very hard. So agents will keep taking advantage of new writers, and new writers will continue to sell all rights to their novels for next to nothing.

When boiled down, it is a game of control here at the end of 2013, just as it was at the end of 2012.

— Traditional publishers want to control all rights and control the writers that work for them.

— Agents feel their control and place in the industry slipping away, so are turning more and more to scamming writers.

— And writers are learning how to use the control and freedom they have gained over the last few years.

But even with all that, 2013 has been a pretty stable year with most developments favoring indie writers. I have a hunch that unless one of the major impact events actually happen, 2014 will be about the same.

I’m now writing fiction like crazy, so every word I write here takes time from that. And I have to justify this somehow in how I make a living.

So, if you feel this helped you in any way, toss a tip into the tip jar on the way out of the Magic Bakery.

If you can’t afford to donate, please feel free to pass this chapter along to others who might get some help from it.

And I would like to thank all the fine folks who have donated over this last year. I don’t always get a chance to respond, but the donations and the comments both after the posts and privately are really keeping me going on this. Thanks!

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SMITH'S MONTHLY #37
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Non-fiction Serial: Part One of Three "Killing the Sacred Cows of Publishing."
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SMITH'S MONTHLY #38
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Non-fiction Serial: Part Two of Three "Killing the Sacred Cows of Publishing."
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SMITH'S MONTHLY #39
Novel: (Not written yet)
Non-fiction Serial: Part Three of Three "Killing the Sacred Cows of Publishing."
Short Stories (not written yet)